Working compulsory licensing
according to TRIPs
- The Essential Drug Candidates -
INTERNAL WORKING DOCUMENT FOR MSF
Pierre Chirac
Access to Essential Medicines
Médecins Sans Frontières
November, 25th 1999
Many thanks to Pascale Boulet, Ellen 't Hoen and Jean-Rigal; Daniel Berman, Bernard Pécoul, Carmen Pérez-Casas. Special thanks to James Love for making precious information available through the Internet.
Content
Legal and political background...... page 3
List of patented drugs in the WHO's Essential Drug List...... page 6
Complementary list of essential drugs according to MSF...... page 7
Case studies
azithromycin...... page 8
ceftriaxone...... page 10
ciprofloxacin...... page 12
didanosine...... page 14
fluconazole...... page 16
indinavir...... page 18
lamivudine...... page 20
nevirapine...... page 22
ofloxacin...... page 24
zidovudine...... page 25
Conclusion...... page 27
Bibliography...... page 28
Legal and political background
- WTO
The Final Act of the GATT Uruguay Round, signed on April 15th, 1994, gave birth to the World Trade Organisation (WTO). This agreement ratifies the world-wide implementation of a free-trade economy. Two types of provision within WTO seem particularly important with regard to pharmaceutical policy, and particularly for the accessibility (i.e. affordability) of drugs in developing countries: those that put an end to protectionist measures, and those that define as mandatory the protection through patents of new drugs and their respective manufacturing processes, i.e. the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). The latter is particularly important, as implementation of the TRIPS agreement in national patent law is compulsory for all WTO members (by year 2000, 2005, or 2006 according to the level of development and the level of previous patent rights in developing countries).
Many developing countries did not fully acknowledge patent rights in the area of pharmaceutical products before TRIPS (Paris convention), as patent protection was voluntary. Full implementation of the TRIPS agreement will have consequences for access to essential medicines. Concerns about the effect of TRIPS on access to drugs include the following issues (1):
Increased patent protection will lead to higher drug prices, while the number of patented drugs of importance from a public health point of view will increase in the coming years;
The access gap between developed and developing countries will increase. A key question is should developing countries wait for years before they can have access to pharmaceutical innovations?
Enforcement of the WTO regulations will have an effect on local manufacturing capacity and remove a source of generic innovative quality drugs on which the poorer countries depend;
There is no reason to believe that the Agreement will encourage technology transfer and R&D in developing countries. Pharmaceutical companies in the developed world have stated repeatedly that the reason for not conducting research on tropical diseases is the lack of protection for innovations in some developing countries, which would also explain their limited investments in the countries concerned. However, it is unlikely that Western manufacturers will devote much effort to non-solvent populations, with or without patents. All things considered, it is to be feared that tropical research will not have a more promising future, even if patents are widely enforced.
In conclusion, the enforcement of the WTO agreements with regard to the pharmaceutical sector raises certain doubts and concerns. This is why an international debate has been opened on how to minimise the potential drawbacks of WTO agreements for access to drugs (i.e., affordability of new essential drugs).
The TRIPS Agreement is to some extent a balanced agreement. The potential negative impact of patents on prices (linked to the abuse of the dominant position of the patent holder) can be remedied under the TRIPS. Articles 7 and 8 of TRIPS clearly mention that “the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations ” (Art. 7). “Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement (Art. 8-1). ”
There are two main ways of trying to mitigate the consequences of the WTO agreements: parallel imports and compulsory licences, two options that countries could still include in their national legislation for possible use one day.
- According to the legal principle of "exhaustion of rights,” the holder of a patent in a country X cannot prevent this country from importing the drug from a country Z where one of its subsidiary is producing and selling this drug at a lower price (parallel importing).
- The second way of minimising the negative effects of the WTO agreements is compulsory licensing: the rights of a patent holder can be limited under certain conditions defined by Article 31 of TRIPS. According to this article, WTO members may “allow for other use of the subject matter of a patent without the authorisation of the right holder, including use by the government or third parties authorised by the government. ” There is no limitation on the grounds for utilising Article 31, but conditions to be fulfilled include the provision that “prior to such use, the proposed user has made efforts to obtain authorisation from the right holder on reasonable commercial terms and conditions and that such efforts have not been successful within a reasonable period of time.”
WTO Members seem to have some room to manoeuvre in interpreting Article 31 in light of Articles 7 and 8. Indeed, Article 31 stipulates, for instance, that the requirement of preliminary efforts to obtain authorisation from the right holder before the granting a compulsory licence “may be waived by a Member in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use.”
- WHO
In May 1999, the 52d World Health Assembly in Geneva adopted Resolution WHA52.19 on the Revised Drug Strategy (RDS). This resolution gives WHO the go-ahead to expand its work on a range of issues that affect access, quality, and rational use of drugs including the effects of international trade agreements on access to essential medicines.
The resolution notes that “there are trade issues which require a public health perspective, ” and takes note of “concern of many WHO Member States about the impact of trade agreements on access to and prices of pharmaceuticals in developing and least developed countries.” It urges countries to “ensure that public health interests are paramount in pharmaceutical and health policies,” and “to explore and review their options under international agreements, including trade agreements, to safeguard access to essential drugs.” It charges WHO with “monitoring and analysing the pharmaceutical and public health implications ” of trade agreements so that member states can develop pharmaceutical and health policies and regulatory measures that are “able to maximise the positive and mitigate the negative impact of those agreements.”
The TRIPS Agreement sets out minimum requirements. It also provides options to incorporate provisions in national patent law to ensure and increase access to drugs. The RDS resolution gives WHO the mandate to assist countries in developing or adjusting patent legislation in order to increase access to drugs and to protect public health. Examples of such options are parallel imports of patented drugs and compulsory licensing (2).
- Médecins Sans Frontières (MSF)
Médecins Sans Frontières (MSF) is an independent medical relief organisation, dedicated to assisting vulnerable populations. In over 80 countries world-wide, MSF provides both life-saving emergency aid and longer-term assistance to make basic health-care services available to the most vulnerable or excluded communities. MSF is currently managing about 400 relief programs; it has sections in 18 countries on all continents.
Thousands of physicians and other health professionals have worked in the field with MSF over the past 28 years. Their analysis is that the gap between the richest and the poorest parts of humanity has widening in most cases. MSF has identified the following four problems that interfere with access to quality drugs:
poor-quality and counterfeit drugs,
lack of availability of essential drugs due to fluctuating production or prohibitive prices,
insufficient field-based drug research to determine optimum utilisation and to re-motivate research and development for new drugs for the developing world,
potential negative consequences of WTO agreements on the availability of new essential drugs.
MSF is an active participant in the debate on the consequences of TRIPS for access to essential drugs and has started a campaign for more humane international trade agreements that pay increased attention to public health, provide for increased R&D for tropical diseases, and contribute to re-launching production of abandoned drugs.
Patients and doctors need new essential drugs. But these drugs must be available, affordable, and properly used. While the rational use of drugs is still a challenge, affordability is a growing concern. The growing market of generic drugs in developed and developing countries may give the impression that inexpensive drugs are widely available for every disease. Many essential drugs are available in a generic form—in which case price is not an issue. However, this is not true in all cases. More and more new essential drugs (new antibiotics, drugs against HIV/AIDS, and so on) are not available as generics.
MSF is concerned that access to essential drugs could be further jeopardised by the TRIPS Agreement in that TRIPS strengthens the power of patent holders. The monopoly enjoyed by patent holders often leads to very high prices for new and innovative drugs. This undermines the affordability of essential drugs for most of the people in developing countries. This fact is already clear from the world-wide market for AIDS drugs.
MSF believes that Article 31 of TRIPS (which addresses compulsory licences) must be utilised to lower the price of patented essential drugs along with other means of lowering prices. This paper outlines a list of patented essential drugs. It describes 10 exemplary cases in which Article 31 may be a solution to the problem of excessive price.
Examples include essential anti-infectives such as quinolones in multidrug-resistant tuberculosis or azithromycin in trachoma; an essential drug for a lethal opportunistic infection (fluconazole); and some of the antiretrovirals (three nucleoside HIV reverse transcriptase inhibitors including one also used against hepatitis B (lamivudine), one non-nucleoside HIV reverse transcriptase inhibitor that is involved in preventing mother-to-child transmission, and the first-choice protease inhibitor). Other antiretrovials could have been selected here and would certainly qualify for compulsory licensing. Criteria include:
public-health relevance of the disease (morbidity and/or mortality),
essential nature of the drug (i.e., few alternatives are available),
time remaining before the patent expires,
excessive price; potential alternative sources (example of price differentials),
R&D and production costs; world sales (when available).
We suggest that these drugs be among the first to benefit from compulsory licences. Countries would allow either a local manufacturer to become an alternative source to the patent holder, or would import the drug from a supplier other than the patent holder.
patented drugs on the WHO's Essential Drug List
Generic Name / Therapeutic Class / Expiration Date of Patent in US (3)ceftriaxone / anti-infective / June 1999 in developing countries, with patent extension until 2001 in developed countries
ciprofloxacin / anti-infective / September 2001 in developing
Countries, with patent extension until
2003/04 in developed countries
doxazosin / antihypertensive / November 1998 in developing
Countries, with patent extension
Until 2000 in developed countries
eflornithine / trypanosomiasis / August 2000
imipenem + cilastin / anti-infective / N / a
mefloquine / malaria / October 2004
tamoxifen / hormonal / August 2002
zidovudine (azt) / AIDS (only for
MTC transmission) / September 2005
The list above is to be read with caution. It is only based on the patent status in the United States (where the information is the easiest to get, free of charge). In some countries, patents may last for longer (notably where an extension of the patent term is possible), or shorter times. Five more drugs from the last WHO Essential Drug List have been under patent until 1999 (amoxicillin + clavulanic acid, ipratropium bromide, ivermectin, ketoconazole, and vecuronium).
Essential drugs
The World Health Organisation published the first Essential Drug List (EDL) in 1977. Essential drugs are “those that satisfy the health needs of the majority of the population; they should therefore be available at all times in adequate amounts and in the appropriate dosage form.” The first EDL contained 200 drugs. The EDL is revised every two years; the current list contains 308 drugs. The inclusion criteria for the EDL are proven safety and efficacy and reasonable price. Most of the drugs on the EDL are available as generic drugs.
Because of prohibitive cost, a number of essential drugs have not been included in the EDL. All the AIDS drugs (except AZT for the prevention of mother-to-child prevention) and certain new antibiotics are not included even though infectious diseases such as AIDS and tuberculosis are responsible for a large proportion of deaths in low- and middle-income countries. Of course there are other obstacles besides drug prices for implementing AIDS treatment in some countries. But price is such a barrier that it stops virtually any initiative in this field.
MSF argues that the WHO list should hold at least the following essential drugs:
Complementary list of essential drugs according to MSF
Generic Name / Therapeutic Class / Expiration Date of Patent in USazithromycine / anti-infective / November 2005
didanosine (ddI) / AIDS / October 2006
fluconazole / antifungal / January 2004
indinavir / AIDS / May 2013
lamivudine (3TC) / AIDS / February 2009
nevirapine / AIDS / November 2011
ofloxacin / MDR-TB / September 2001
This list is not a comprehensive one, as the objective is to provide only some examples here. For instance, it contains only drugs directed to infectious diseases and AIDS. It contains only some of the AIDS drugs available today.
1
azithromycin
(Zithromax®, Pfizer laboratory)
Therapeutic class
- Anti-infective, macrolide group.
Indications
“ Azithromycin is a nitrogen-containing macrolide or azalide with actions and uses similar to those of erythromycin [which is on the WHO's essential drug list] ” (4).
More recently, azithromycin has been shown to be the most appropriate treatment for trachoma (5).
Public health relevance
Trachoma (due to Chlamydia trachomatis) is a senior threat to public health : endemic in 49 countries (600 million people), mainly Africa (1999) ; 5.6 million total sight loss, visually impaired, or at immediate risk of blindness (1997) ; 146 million active cases of trachoma in need of treatment (1997) (6).
Essential drug
Before azithromycin : “ The best treatment for trachoma is a combination of long acting sulfamides per os plus local broad spectrum antibiotics for weeks, even three to four months”(7). “Tetracycline ointment during several months ”(8).
Today : WHO : “ The drug's efficacy and safety record of azithromycin makes it an excellent candidate to become the first-line treatment for severe trachoma (though not all trachoma) ” (6).
“Azithromycin has already been tested in a number of countries. The initial results look very promising : one dose of antibiotic per year may eliminate the blinding propensity of trachoma” (9).
A study published in the August 21th 1999 issue of The Lancet provides evidence that treating entire communities with a short course of azithromycin is more effective than the standard six-week course of daily tetracycline ointment in controlling development of trachoma. (5).
Patent status
. 1981: first patent application of Pliva in Croatia for azithromycin. 1986 : Pliva signed a licensing agreement with Pfizer, granting Pfizer an exclusive right for the sale of azithromycin in the USA and western Europe.
. 09/07/1987 Pfizer applied for a new patent through the PCT[1] procedure.
. 08/07/1988 Pfizer applied for the patent to OAPI (African Intellectual Property Organization, francophone African countries ). Issued 31/03/89 (estimated expiration date : 2008).
. 15/06/88 ARIPO[2] patent application, patent issued 27/07/89 (estimated expiration date: 2008)
. 28/06/1988 Pfizer applied for the European patent (expired on 28/06/2008).
. 1988 Pliva launched azithromycin (Sumamed) for Central and Eastern Europe.
. 1991 Pfizer launched azithromycin (Zithromax) for USA and Western Europe.
. 1996A Spanish laboratory patented other process for manufacturing azithromycin.
. 1996 Pfizer licensed others to sell azithromycin under new trademarks (e.g. in Spain : Pharmacia Upjohn, and Almirall Prodesfarma)
. 1998 Zithromax® was the 3rd prescription product in sales in USA” (10).
Pfizer holds US patent n° 4474768 for azithromycin issued October 2nd 1984[3]. Market authorization for azithromycin was delivered in 1991 and 1992 in the US and France. Patent will expire in the US in 2005, in France in April 2006 (11). That means 14 years of monopoly.
Price
Cost in France of 6 x 250 mg capsules is 120.3 F (20 FF per capsule: around 3 US$) (12).
"Price ranges from 3.64 to 7.12 US $ for 250 mg capsule in some industrialised countries. Four capsules are necessary to treat an adult (70 kg), 2 for a child (25 kg). This leads to 14.56 to 28.48 US $ for an adult ; 7.28 to 14.24 $ for a child." (6).
Alternative sources
Vita from Spain is selling azithromycin with 25 % rebate. Other manufacturers from Bangladesh, India, and Portugal offer the same product at more than 70% less than Pfizer’s one, and, finally, Cipla from India offers it at 83% rebate (10).
Cost. World sales
“ Global sales of Zithromax®… increased by 44 % to US $ 441 million in the first quarter of 1999, … and continues to be the most prescribed brand-name prescription antibiotic in the US” (Pfizer Press release) (10).
Zithromax®'s world sales were 821 million US $ in 1997 (world rank 38) (17).